3. The Budget The device that allocates the shortage of public money There is never enough money to do all the things people want done.

4. The Budget We use budgets to decide what is most important and who gets what proportion, or share, of public resources

5. Therefore: A budget (should) = a priority list of government actions and policies

6. Budget Analysis Budget Analysis answers questions People inside and outside public administration want to know what the numbers and information found in budget documents mean

7. Budget Analysis In its most basic form, Budget Analysis is a way to ask and answer questions about the budget and reveal what it represents

8. Budget Analysis Governments need analytical information to help decide how money should be allocated

9. Budget Analysis Here is the U.S. Treasury definition of Budget Analysis: Budget analysis is the objective application of analytic tools and disciplines designed to:

10. Budget Analysis 1. Improve the process of setting priorities 2. Make better decisions at every level of public administration transparency 3. Increase transparency 4. Maintain fiscal discipline

11. 1. Improve the process of setting priorities We analyze a budget because we want to understand and improve it. We analyze a budget because we want to understand and improve it. We want to allocate money where it will do the most good; where it will get desired results. We want to allocate money where it will do the most good; where it will get desired results.

12. 2. Make better decisions at every level of public administration Budgets allocate money to prime ministers, parliaments, mayors, police, hospitals, soldiers and schools. Budget Analysis can guide government actions at all levels by understanding the resources available and what they can really do.

13. transparency 3. Increase transparency Democracy requires transparency If the government does not explain what it is doing with tax money, support for elected officials and public sector workers will diminish. The people have a right to know how we are spending their money.

14. 4. Maintain fiscal discipline Budget deficits grow one expenditure at a time. Budgets cannot be properly controlled without analysis of the individual details AND the overall impact of expenditures.

15. BUDGET ANALYST : A person skilled in the use of financial, non-financial, and policy data to….

16. BUDGET ANALYSTS 1. Estimate the results of budgetary operations 2. Devise and check the numbers in budget documents

17. Budget Analysts 3. Assess proposals for funding Analysts form expert opinions about the value of budget allocations and expenditures.

18. Budget Analysts 4. Learn what the money buys Is it worth it? Is it the right thing to buy?

19. Budget Analysts 5. See how money is wasted or how it accomplishes public purposes

20. 6. Devise alternative spending options Analysts almost always imagine alternative ways to spend money better. Good budget systems seek out these ideas and make sure that decision makers have the chance to consider them.

21. An analyst is well versed in The goals, objectives, & priorities and current budget trends of the activities or programs of a ministry or a sector Such as education, health or defense

22. Budget Analysts Work in a professional and disciplined manner

23. Budget Analysts Are able to communicate well with all levels in an organization, including top policy makers

24. Budget Analysts K now both specific details and the overall budget picture in their sector of responsibility

25. An analyst is well versed in: GOALS GOALS –The long term results that a ministry wants to achieve OBJECTIVES OBJECTIVES –The intermediate steps needed to reach a goal

26. An analyst is well versed in: PRIORITIES PRIORITIES –Activities that a ministry wants to complete first CURRENT BUDGET TRENDS CURRENT BUDGET TRENDS - Recent changes and plans - Recent changes and plans ACTIVITIES OR PROGRAMS ACTIVITIES OR PROGRAMS –Groups of Activities designed to reach goals and objectives

27. ANALYSTS MAY STUDY SECTORS, Such as public safety

28. OR SPECIFIC MINISTRIES, Such as Agriculture

29. Budget Analysts Each analyst is knowledgeable about budgeting concepts AND can apply that knowledge in a variety of ways

30. Budget Analysts Know and can explain - How their budget system works - How money is allocated

31. ANALYSTS UNDERSTAND BOTH BUDGET FORMULATION and BUDGET EXECUTION

32. Here are some KEY QUESTIONS that every budget analyst should try to answer about budget:

33. WHEN should budget money be spent? Next year? Next Month?

34. Who should benefit? Students? Farmers? Pensioners?

35. WHO should spend the money? –Central Governments? –Local Governments –Citizens? –Private Organizations?

36. Priorities The answers to these questions reveal the priorities of any budget The answers to these questions reveal the priorities of any budget Priorities are the starting points of all budget analysis Priorities are the starting points of all budget analysis Priorities shape our analytical judgment and guide analysts in making recommendations Priorities shape our analytical judgment and guide analysts in making recommendations

37. Who Has Budget Priorities? Everyone with an interest in the budget, including ministers, interest groups (Teachers, farmers, NGOs, pensioners, auditors, etc.) Everyone with an interest in the budget, including ministers, interest groups (Teachers, farmers, NGOs, pensioners, auditors, etc.) Public officials responsible for the budget Public officials responsible for the budget Analysts, who see extensive budget data and develop personal priorities on how best to spend money Analysts, who see extensive budget data and develop personal priorities on how best to spend money

38. Who determines budget priorities? Public officials Public officials –The Prime Minister –The Finance Minister –Other Ministers –Parliament These officials have the power to present and vote on budgets, which will always reflect their priorities in some way.